May 03, 2006

Microsoft In a Hard Place

For more than a decade, it's seemed that Microsoft could just mint money. In fact, they even issued a product called "Money" to challenge Quicken's stronghold on the financial management software market, after regulators said the Redmond company would be blocked from merging with Intuit, due to anti-competitive issues. But recent years have seen struggles for the software monolith, as they've seen more nimble challengers like Google and Apple make significant headway in markets where Microsoft once expected to run roughshod over competition. While the firm continues to turn significant profits, they certainly aren't seen as being the leaders in innovation (some argue if they ever were), and they're more recognized for their failing business units (MSN), maniacal corporate culture (see Steve Ballmer) and delays in their planned Operating System upgrade, Vista.

In what may seem like a true sign of the apocalypse to those of us who have seen technology columnist John Dvorak spit at all things Apple for years, he now turns the other cheek and says that Microsoft has completely lost their way. In a piece for CBS Marketwatch, Dvorak, in his grumpy tradition, gives "eight signs the software giant is dead in the water", ranging from the aforementioned MSN and Vista to the mundane Office 2007, .Net, and obsession with Google. He says Microsoft "is too easily distracted by successful companies who are not competitors", which rings partly true. In Silicon Valley the question from VCs to potential startups for decades was "how will you compete with Microsoft?", with the given belief that they would eventually go after you, and in most cases, you would die fighting (see Netscape, Borland, and others). Now, Microsoft is drunk with money, and their best employees have gone on to better things.

Speaking of Microsoft money, even Bill Gates is losing it big time. The company's stock fell nearly 4% again today, and is well off of its split-adjusted peak of more than $60 a share, it's now at only $23 and change. Of course, Bill Gates is now saying he wishes he weren't the world's richest man, saying nothing good comes out of it. Now that's not very fun. Wouldn't you like for him to share his wealth with you - so you both can have your wish come true?